Location-Based Merchandising, also referred to as GeoMarketing, Proximity Marketing, Location-BasedMarketing, or lo-so apps are becoming widespread especially when combined with social media applications. Generally, people use lo-so apps on their phones to “check in” whenever they go places. Global Positioning Satellitesystems (“GPS”) locate, the users and determine what “venue” they might be near, giving them options to select a location or create a new listing. These “check ins” allow friends to know the whereabouts of a user, or where they frequently go. Some services allow users to leave location-based tips for friends to discover later, and several involve social competitions, or the ability to unlock digital badges, stickers, and prizes. Businesses can announce specials or promotions through these applications so that when users “check in” they receive notifications of nearby deals or promotions.
Location-Based Merchandising is the localized wireless (distribution of advertising content associated with a particular place. Transmissions can be received by individuals at or near the particular location who wish to receive them and have the necessary equipment to do so. Distribution may be via a traditional localized broadcast, or more commonly is specifically targeted to devices known to be in a particular general area.
The location of a device may be determined by:
                A cellular phone being within an antenna beam pattern of a particular cell;        A Bluetooth or WiFi device being within range of a transmitter;        An Internet enabled device with GPS enabling it to request localized content from Internet servers.        
Communications may be further targeted to specific groups within a given location, for example content in tourist hot spots may only be distributed to devices registered outside the local area. Communications may be both time and place-specific, e.g. content at a conference venue may depend on the event in progress.
Uses of proximity marketing include distribution of media at concerts, information (weblinks on local facilities), gaming and social applications, promotions, and advertising.
Bluetooth-Based Systems
Bluetooth, a short-range wireless system supported by many mobile devices, is one transmission medium used for proximity marketing. The process of Bluetooth based proximity marketing involves setting up Bluetooth “broadcasting” equipment at a particular location and then sending information which can be text, images, audio or video to Bluetooth enabled devices within range of the broadcast server. Other standard data exchange formats such as Vcard can also be used.
It used to be the case that due to security fears, or a desire to save battery life, many users keep their Bluetooth devices in OFF mode, or ON but not set to be ‘discoverable’. Because of this, often regions where Bluetooth proximity marketing is in operation it is accompanied by advising via traditional media—such as posters, television screens or field marketing teams—suggesting people make their Bluetooth handsets ‘discoverable’ in order to receive free content—this is often referred to as a “Call-to-Action.” A ‘discoverable’ Bluetooth device within range of the server is automatically sent a message asking if the user would like to receive the free content.
Some mobile phones have Bluetooth switched ON by default, and many users leave Bluetooth switched on for easy and automatic connection with car kits and headsets. Some implementations of Bluetooth proximity marketing require users to run Java applications on their phones to enable them to receive content. This has the advantage that only those who choose to will receive content. Others require no handset-side software.
The diversity of mobile phones is huge. Screen sizes and supported file formats varies greatly. To obtain the optimal user experience with Bluetooth Marketing, the Bluetooth system automatically recognizes phone models and delivers the content automatically when a device is within a predefined geographic region.
GSM-Based Systems
GSM 03.41 which defines the Short Message Service-Cell Broadcast (SMS-CB) allows messages (advertising, public information, etc.) to be broadcast to all mobile users in a specified geographical area. Some phones/devices have an option to turn off the receipt of such messages. There are provisions for “welcome” messages to be sent when entering new countries introducing networks available. There are also capabilities for messages to be sent by emergency services. GSM localization accuracy varies depending on location.
For example, in the Philippines. GSM-based proximity broadcast systems are used by select Government Agencies for information dissemination on Government-run community-based programs to take advantage of its reach and popularity. It is also used for commercial service known as Proxima SMS. Philippines has the world's highest traffic of SMS (locally referred to as texting). Bluewater, a super-regional shopping centre in the UK, has a GSM based system supplied by NTL to help its GSM coverage for calls, it also allows each customer with a mobile phone to be tracked though the centre which shops they go into and for how long. The system enables special offer texts to be sent to the phone.
Current Technology Challenges
The current technology for Location-Based merchandising has certain limitations that inhibit widespread utilization. These limitations include:                1. May require public broadcasting of location information, which can create privacy concerns and thus may appeal to a limited market of customers;        2. May require loading of custom app on mobile phone—one app per merchant, limited phone types;        3. May require registration with each participating merchant—market limiting;        4. Widespread use will drive extensive usage-based charges for the consumer; and        5. Complicated for merchant and general public—market limiting.        